There is no place in Canada like Honest Ed's, the venerable discount store two blocks from Jane Jacobs's old house. Its building is shambling and confusing in a way few retailers would countenance; it's bedecked with hand-painted signs of the greatest possible hokiness; it is run by locals, the Mirvish family, which has operated it since the 1940s. This year, it's going to be demolished for a proposed complex of shops and rental housing. What would Jacobs, the activist and great theorist of cities and urban economies, say?

It's easy to guess that she would have been upset. In contemporary urbanism, Jacobs is understood as the champion of local colour: her name and big black glasses connote the small-scale and the bottom-up, charming old buildings and protest signs against urban expressways. Her observation of "the ballet of the good city sidewalk" in Greenwich Village, in The Death and Life of Great American Cities (1961), did much to stop the theories and bulldozers of 20th-century urban renewal. Her activism in New York, and then in Toronto after she moved there in 1968, helped stop the construction of expressways that would have gutted vital urban neighbourhoods. In Toronto, she helped reinforce the political and planning culture that kept downtown Toronto a vital and prosperous place.

This familiar Jane Jacobs does emerge in Vital Little Plans, a wonderful new anthology that captures her confident prose and her empathetic, patient eye for the way humans live and work together. She is a "city naturalist" in the field: Writing about New York's Diamond District, capturing the silver dust on the floor and the worldless haggling-by-gesture of a cluster of dealers at auction. She has, as she writes approvingly of a city planner, "an endless preoccupation with the living city." She is moving toward her increasingly idiosyncratic economic theories and her metaphor of the city as an ecosystem, "an intricate, living network of relationships, made up of an enormously rich variety of people and activities."

Writing in Fortune magazine in April, 1958, in a long essay called Downtown Is for People, she articulates her characteristic close reading of the city fabric and what urbanists now call the "pedestrian realm" – in other words, the street, at eye level. "If you get out and walk, you see all sorts [of] clues," she writes. "Why is the hub of downtown such a mixture of things? … Why is a good steak house usually in an old building? Why are short blocks apt to be busier than long ones?"

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This is a direct foreshadowing of Death and Life. But, as the anthology traces the seven decades of her career as a thinker and writer, she does much else, moving from the fabric of the city to "the nature of economies," as the title of a later book put it. And her stances are unpredictable: She "offers little comfort," as editors Samuel Zipp and Nathan Storring write in their fine introduction, "to established political traditions, whether radical or conservative."

For instance: on Honest Ed's. In 2000, she gave a talk in Washington called Time and Change as Neighbourhood Allies, and discussed how a neighbourhood street can suffer when it becomes too popular: "The butcher shops and bakeries disappear.… As diversity diminishes, into its place comes a kind of monoculture." Jacobs talked about how this cycle was wrecking Bloor Street, near her house, and she had a solution. Local businesses there, including Ed's, can survive only if they own their buildings, she said; she mused that governments could "foster business stability and neighbourhood stability" by encouraging such ownership.

Bold government intervention in the service of small, interesting, locally owned businesses? Good luck building a coalition around that and good luck implementing it. But Jacobs was no politician or ideologue. She contained multitudes.

Eyes on the Street, Robert Kanigel's big, comprehensive biography, casts her as "the independent mind in conflict with received wisdom." This is a beloved type in American letters. (Her youthful home in downtown Brooklyn, N.Y., was in Walt Whitman's territory, a confluence that Kanigel doesn't miss.) And Kanigel draws a fuller portrait of Jacobs than has emerged in previous accounts, unpacking the sources of her stubborn self-confidence and tracing the long development of her intellect. She grew up in Scranton, Penn., in a genteel and well-read family – "a home of healthy, somewhat madcap exuberance, lively talk, free questioning and encouragement." School did not agree with her ("I was an outlaw," she recalled later) and, in 1934, she set out for New York. She was 18.

Greatness did not find her quickly. Instead, she worked and wandered: She did secretarial work, rose to an editorial role at a trade magazine, served in America's propaganda mills during the Second World War and afterward, with a magazine called Amerika that was distributed in the Soviet Union. She met and quickly married Bob Jacobs, an architect; had three kids; and moved into an old candy store on a rough block of the chaotic, bohemian West Village that they bought for $7,000 (U.S.). Then she landed at Architectural Forum, a Time-Life magazine she and Jacobs (later a specialist in hospital design) read with interest, and then launched her career as intellectual-without-portfolio.

In all this a theme emerges: Jane Jacobs's status as a working woman and mother. She wrote between shopping and sending birthday cards. "Hers was not a man's life," Kanigel writes.

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Sadly, he finds it necessary to argue that "she was never beautiful," that in her public life she was "fat and dumpy." The sexism is glaring and also weirdly out of place: Jacobs showed no lack of self-esteem, and was both powerfully charismatic and profoundly self-assured. (And she was definitely a feminist, as this volume makes clear.)

And yet, there is an important insight here. The Jacobs who emerged in the public eye in the 1960s was already past 40. The long first 20 years of her career was disrupted in part by motherhood. By the time she found her real subject and her voice, she was a grown-up. Her strength was not the callow confidence of the brilliant twentysomething (though she'd had that, too); it was the assurance of an adult who had seen things and of a woman who didn't worry about anyone's approval.

In the 1960s, this made her a critic of singular power. What she perceived in the landscape of modern city planning was that the emperor had no clothes.

The new discipline of urban design would draw on the idealistic grand projects of postwar Europe, stripping away "slums" and "blight," wiping out unsanitary housing conditions, providing light and air to rival the suburbs, separating commerce and industry from housing. And, certainly, making room for the automobile.

But the version of this ethos that landed in the United States' industrial cities was both idealistic – it would be modern! – and resolutely blind to the virtues of the real, living city. In 1956, Jacobs spoke to a planning conference at Harvard about what was missing in the grand urban projects: the storekeeper who knows everybody, the guitar teacher's studio, the hole-in-the-wall political club, "strips of chaos that have a weird wisdom of their own." That talk (published and collected as "The Missing Link in City Development") won her support and a publishing deal for what became Death and Life.

And she was profoundly right: Right about what was missing in this vision, right about the lack of consultation and the condescension with which planners viewed the "urban poor." By now Jacobs's vision is common sense in planning circles, from the emphasis on the fine grain and "public life" of the street, as Danish architect Jan Gehl puts it, to the understanding that urban infrastructure was profoundly destructive to the lives of city dwellers.

The question today is whether Jacobs – or our current understanding of her – is right now. She formed her sensibility amid the dying industries and moribund docks of 1960s New York. Today, North American cities are not being "renewed," but are renewing themselves with a flood of investment and migration she did not foresee. Her former candy-store home in Greenwich Village sold in 2009 for $3.3-million, and the grand old Toronto house that Jane and Bob Jacobs fixed up in the seventies is worth something like $2-million (Canadian). Not many writer-and-architect couples are moving in to such neighbourhoods; they are increasingly becoming, in Jane Jacobs's phrase, "exclusive preserv[es] for high-income people."

This is not a problem that is going away: Successful cities around the world are growing rapidly, attracting flows of global capital and facing crippling affordability crises. More housing is a critical need and the coming generation of city building will involve some big projects.

And Honest Ed's, her colourful local discounter, will go down for one of them. The proposed development there would include some affordable housing and many market rentals: not cheap, but accessible to middle-class people without capital. It also promises to add density, make space for emerging entrepreneurs, preserve substantial architectural heritage and establish a strong public park and plaza – all profoundly urban and distinctly Jacobsean goals. Some fans of Jacobs won't like it: it is tall, it will remake a neighbourhood, it involves big business. But cities, and markets, are always changing. "Nothing," Jacobs wrote, "is static." A true city naturalist knows that.

Alex Bozikovic writes about architecture and urbanism for The Globe and Mail and is co-author of a new edition of Toronto Architecture: A City Guide, which will be published in 2017.